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What is data visualization and why does your business need it?

Whether you know it our not, your business collects a lot of data. Data visualization helps you make sense of it.
6 feb. 2020 • Durata lecturii: 4
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Data visualization can help you make sense of the overwhelming amount of data your business has to deal with

With the rapid increase in the amount of data, the need is greater than ever for a way to put this data in a usable, insightful format. As a result, many organizations use data visualization to collate all their information into a format that can help them make informed decisions.
Even before the advent of computers and other technology, the concept of drawing pictures was used to help understand the data. In the 17th and 18th century, maps, graphs or pie charts were used to help people make sense of the data they had access to. However, as data has become more complex, manually extracting in-depth detail has become difficult.
Fortunately, computers have made it possible to not only quickly convert high volumes of data, but to put it in a format that's easy to understand.

What is data visualization?

Simply put, data visualization is the visual representation of data in a pictorial or graphical format. It helps people understand the significance of data and create valuable insights out of it. It shows the relationship between data and communicates it through images.

Why is data visualization important?

The way the human brain processes information, it’s easier to identify patterns and trends visually than with huge rows of spreadsheets and reports. Data is much more valuable when it’s visualized. It allows people to look at complex sets of information and digest their meaning at a glance.

What types of data visualization are there?

There are a variety of ways to visualize data, and each works best for different types of data comparison. Let's have a look at some of the most common formats.

Line graph

A line graph is great for understanding trends and fluctuations in data. Line graphs are used to compare different data with multiple series. It works well for demonstrating trends that change over time.
line graph

Bar chart

Bar charts are great for comparing multiple similar sets of data.
What is data visualization and why does your business need it? - Image 1


Scatterplots are used when there are many different data points. It's also used to identify correlation. Scatterplots help to demonstrate the distribution of data.

Pie charts

The good old pie chart. Pie charts are handy for showing percentages of a whole.
pie chart

Waterfall charts

Waterfall chart visualization is used to show how an initial value is affected by intermediate values to give a final result. The values could be either positive or negative.
waterfall chart

Area graphs

Area graphs are quite similar to linear charts. Area graphs illustrate the change in a quantity over time. Stacked area graphs allow you to compare different data sets over the same time period.
area graph


Histograms are useful to measure frequency rather than a trend that changes over time. A histogram is a combination of a bar chart and line chart. It gives an idea of concentrated data, the extremes, gaps and unusual values throughout the data set.


Ok, we probably don't need to define a map for you. But they can be a great data visualization by comparing similar data sets in different geographical regions.
map chart


Think of indicators like a temperature gauge that shows how current data compares to the overall trend. It's a snapshot of current data put in the context of historical data.
indicator gauge

Why your business should use data visualization

According to an Experian report, 95% of US organizations use data to explore and identify business opportunities, while 84% believe that data is essential in forming their business strategy.
Here are some of the things data visualization allows you to do:

Cleanse your data

Data visualization tools can help managers to comprehend large bulk of information fast and easily as compared to reports and spreadsheets. It also allows you to filter down to the quality information and easily identify corrupted, inaccurate and irrelevant data.

Identify key business metrics

Data visualization helps you identify the metrics that make a difference to your business. Ultimately, the one metric that supersedes all others is revenue. But visualizing your data helps you identify the metrics that impact revenue.

Strategize with your data

Once you've identified these metrics, you can form strategies for how to improve them. And data visualization also gives you up-to-date feedback on the effectiveness of these strategies.

Easy reporting

Data visualization also makes it simple to provide a snapshot of your business performance. Rather than walk investors or stakeholders through a bullet-pointed list of obtuse figures, you can give them an easy-to-understand, high-level view of the numbers that matter, and how those numbers relate to each other.

Team alignment

This is an incredibly powerful benefit of data visualization. Making your data dashboards visible to the entire team means every team member gets a comprehensive view of how the business is performing. And they get it from the moment they walk into the office in the morning. This level of transparency makes it easy to align your team behind strategies, and makes it easy for everyone to see which strategies are having an impact.

Final words

Every day more businesses are discovering the significance of data visualization. Those businesses that have adopted visualization tools see an enormous increase in their productivity and revenue. It empowers leadership to make informed decisions, and to quickly gauge the impact of those decisions.
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